Thursday, March 31, 2011
Profit taking at the end of the month as the Dow lost 30 points on average volume. Advance/declines were positive. The overall market was stronger than the Dow. We're still overbought here but that hasn't led to any meaningful declines lately. The summation index continues higher. Pullbacks can be bought in my opinion. The employment report tomorrow should be the key for the next move one way or the other. GE was flat on light volume. We've approached the 50 day moving average and a daily downtrend line. If we can get through those on decent volume GE should move higher. I'm still considering the April 20 calls there. Gold had a good day, up $15 on the futures. The XAU gained 1 1/2. ABX, GG and NEM all had gains of 1/3 or so on light volume. The dollar was a bit weaker today. The gold shares are short term overbought. I'd like to get the May calls if we get a pullback. However there is a chance that gold itself will break out to the upside and new highs here. If that's the case I may just try to jump on board. I'll have to see some volume on the breakout though. Mentally I'm feeling OK. The indices are back in overbought mode again and it feels like the market environment before the Japan quake. We'll have to see the reaction to the numbers tomorrow and go from there.
Wednesday, March 30, 2011
Still moving higher as the Dow gained 71 points on light volume. Light volume seems to be the new normal here for the indices. Advance/declines were almost 3 to 1 positive. Summation index moving higher. Very overbought and staying there. End of the month tomorrow, with the employment report on Friday. The market is headed upwards until further notice. GE gained 1/4 on better than lately volume. I might try the GE calls for April if we get some type of weakness near term. Most likely that is just wishful thinking. However if the GE April 20 calls get cheap I'll probably take a shot there. Not set in stone. Gold was up $7 today and the XAU rose 3 2/3. ABX up 7/8, GG up 7/8 and NEM gained 2/3. Volume is still light here. I think the direction of the US dollar near term will determine the direction of gold. We are right at the daily downtrend line for the dollar and have stalled. So we'll see what happens. The employment report could provide direction here. Mentally I'm feeling OK. A little over 2 weeks left in the April option cycle. Not sure I'll be able to put a trade on but we'll see.
Tuesday, March 29, 2011
The Dow gained 81 points today. So much for the expected decline. Advance/declines were 2 to 1 positive. Volume was nothing special. The market is overbought and staying there. We are back in the mode we were in before the Japan earthquake. The market just plows higher. The only caveat that I can see is the volume. It has been anemic. I do not trust light volume rallies. But you cannot argue with price. GE was up 1/8 on light volume. It has been a laggard here. I have no trades in mind for GE. Gold lost a couple of bucks and the XAU was flat. ABX, GG and NEM had fractional moves one way or the other on very light volume again. So the volume question comes up here as well. I'm still considering the ABX calls but I'd like to go to the May option cycle. We'll see. The technicals are giving no clear signal. The dollar didn't move much today. So I'll try and be patient here for now. Mentally I'm a bit tired, did not sleep well. I expected weakness early this week and the market just continues to get more overbought. There's no fighting it. At least I haven't been trying the OEX puts here. The market will go where it wants regardless of my opinion. I'll have to remain on the sidelines until I get a better handle on things.
Monday, March 28, 2011
Opened higher and closed lower for a one day reversal as the Dow lost 22 points on very light volume. Advance/declines were negative. Not a lot to report with regards to todays market movement. It was a tight range throughout the day. I do expect weakness here early in the week to relieve the overbought condition. After that, who knows? End of the month on Thursday and the employment report the following day. GE was flat on little volume as well. Nothing new to report here. Gold lost $6 today and the XAU dropped 3 1/8. ABX, GG and NEM all had fractional losses on very light volume. I'm still looking to do a trade here. I'd prefer to go out to the May option cycle but that is not set in stone. I think that the gold shares will follow the indices lower early this week and that could be the opportunity to purchase some calls. That's a guess as usual. Mentally I'm feeling OK. The dollar is at a key point on the daily candlestick charts, right up against a downtrend line that has been in effect since the beginning of the year. If the line holds it would be bullish for gold. If not, just the opposite. It is something to keep an eye on near term. So I'll be looking for weakness the next couple of days in the indices and go from there.
Friday, March 25, 2011
Still moving higher as the Dow gained 50 points to close out the week. Advance/declines were positive and the volume was light. A very positive week for the stock indices and the summation index has turned back to the upside. We are short term overbought and remain there. I think that we will see some weakness in the beginning of next week and that may be the opportunity to get long. We'll see. GE was flat on light volume. GE hasn't moved as much as the indexes in percentage terms this week and is a relative under performer. No trades there for now. Gold fell $8 today but the XAU only dropped 1 1/8. The gold shares were mixed with fractional moves on light volume. The dollar had a good day for a change. I canceled the open order for the ABX April calls. I'll perhaps try again next week. The dollar looks like it could be moving up from an extended oversold condition. That could prove problematic for gold. So I will have to try and figure things out over the weekend. Mentally I'm feeling OK. 3 weeks to go in the April option cycle. Next week could be the ideal time to put on a trade for April. I'll be checking the charts in the next 2 days to try and find something worthwhile. Friday afternoon now and time for a break.
Thursday, March 24, 2011
Continuing higher as the Dow gained 84 points on average volume. Advance/declines were over 2 to 1 positive. The summation index should be turning around here. We're overbought and staying there as it looks like the event driven decline has ended. It has been a rapid turnaround and I would expect some weakness but there hasn't been any. You can't argue with price. Any pullbacks can be bought, in my opinion. GE gained 1/4 on light volume. GE hasn't regained as much ground as the overall market here. I might try the calls here again but not at this time. Gold was off a few bucks after setting all time highs early in the day. The XAU declined 1 2/3. ABX off 3/8, GG off 7/8 and NEM down 1/3. Volume picked up a bit. The daily charts look like one day reversals to the downside for the gold shares. I'm keeping in the open order for the ABX April calls. I still believe that this trade will work in the next 3 weeks. I could be wrong. The dollar was a bit weaker today. Mentally I'm feeling OK. On day left in the week for trading. The stock indices are overbought but show no signs of slowing down. I have no OEX trades in mind here unless we get to an oversold position. So we'll see. I'm still a fan of the gold shares and will place the ABX trade if possible.
Wednesday, March 23, 2011
We gained back what we lost yesterday as the Dow rose 67 points on light volume. Advance/declines were positive. We're overbought now and right at resistance on the S&P 500. Some type of pause or pull back is in order. Unless we just take off to the upside here but I do not anticipate that happening. I've been wrong before though. So we will have to wait and see how the rest of this week plays out. GE was flat on the day after being weak early. Volume was light. How GE acts here could be a key as well. No trades in mind for GE at the moment. Gold was up another $10 today and is right back to all time highs. The XAU soared 7 3/4 points. ABX up 1 3/4, GG up 1 1/2 and NEM up 1 2/3. Volume picked up on the ascent. It looks like I have missed yet another move in the gold shares. I did place an open order for some ABX April calls in case we get a pull back near term. The dollar was stronger today yet gold rallied anyway. Seasonally March is a weak month for gold but that hasn't panned out this year. And so it goes. Mentally I'm a bit tired. We had a signal on the gold/XAU ratio a few days ago and I did not place a trade. That was a mistake. We were also oversold on the gold shares at the same time. It was a great set up and I didn't do anything. Not sure why but perhaps I was still occupied with the losing GE trade. There are no excuses. I will simply have to do better in the future. There is a reason that this is the toughest game in the world. However the battle always lies within oneself. We'll see what tomorrow brings.
Tuesday, March 22, 2011
The 3 day rally paused today as the Dow lost 18 points on light volume. Advance/declines were negative. Where we go from here is important. I'd like to see some type of decline in the next couple of days to establish a long position. However if we simply continue higher from here, it might mean that the market is stronger than anticipated. We'll see. GE dropped 1/4 on light volume. I'm looking for sideways price action here. Gold was flat today. The XAU gained 1 1/8. ABX and GG were flat on light volume. NEM gained 1 1/2 on better volume. The dollar was flat as well. If we see some weakness in the gold shares, I'm going to be a buyer of some calls. This week or next. The technicals here are mixed so if we see some decline the gold shares will return to oversold. Wishful thinking possibly but that is the game plan for now. Subject to change of course. Mentally I'm feeling OK. Biding my time here for now. Sometimes being patient is the most difficult thing to do but it is important. My feeling is that the events that drove the market south have dissipated for now. That could allow for a rally in the April option cycle. That's my best guess at the moment.
Monday, March 21, 2011
The bounce continues as the Dow gained 178 points on good volume. Advance/declines were about 4 to 1 positive. Is it more than just a bounce? That is the question. Todays action could turn the summation index back up. However we are approaching short term overbought here. I would like to see some pull back near term in order to establish some calls if that is the course of action that I choose. Haven't decided yet. GE was up 1/2 on average volume. No trades there for now. Gold gained $10 as the political unrest in Libya heated up over the weekend. The XAU rose 4 1/3. ABX and GG up 7/8, while NEM gained 3/4. Volume was light. The gold shares a moving off of an oversold condition. If we get some weakness here near term I will consider purchasing some April gold share calls. That is the game plan as of today. The dollar was weaker once again today and the trend there is decidedly down even though we are oversold. That should, in theory, help support the price of gold here. Mentally I'm feeling OK. The market has had quite a snap back rally from its oversold condition during the middle of last week. I would not expect to just go straight up from here but you never know. Volatility has slacked off for now. On to Tuesday.
Friday, March 18, 2011
A positive option expiration Friday as the Dow closed higher by 84 points. Advance/declines were over 2 to 1 positive and volume was heavy. We were higher during the day as the market opened very strong but then we drifted lower throughout the day. I think we will move sideways from here to back and fill. Or perhaps the downtrend will start to gain momentum again. It's all a guess at this point. We're still oversold and the summation index continues moving lower. But the earthquake/tsunami event is over. Once the nuclear power plant problem is contained perhaps the market won't be driven by events for a while. We'll see. GE opened higher and sold off for the rest of the day to end up basically unchanged. Volume was average there. I don't plan on any trades in GE for now. Of course, that could change. Gold had a good day today, up $15. The XAU gained 2 1/4. ABX and GG each rose around a buck, while NEM was flat. Volume picked up a bit today. The dollar took another hit today and that supported the price of gold. I would have liked to have seen a better move in the gold shares but it didn't happen. I'm still interested in the April or May gold share calls. Maybe next week if we get some weakness on light volume. I'll have to check the charts over the weekend. Mentally I'm doing OK. A losing GE trade this week but the damage was minimal. I'm looking for the next trade. We had a huge spike in volatility this week. I don't think that will continue but I could be wrong. A lot of indicators are pointing more towards a bottom in prices for the indices here. So as usual it's a mixed picture as we move into the April option cycle. I'll check things over the weekend and go from there. For now it's Friday afternoon and time for a break.
Thursday, March 17, 2011
We got the expected oversold bounce today as the Dow gained 161 points on average volume. Advance/declines were about 3 to 1 positive. I would not expect a sustained uptrend to just appear starting today. We need to have at least some sideways movement for a while. Plus there is no guarantee that the recent decline is over. The summation index is still heading down. So we will have to wait until things sort themselves out before having a chance at guessing the markets direction from here. GE gained 1/4 on good volume. GE had a gain of double that early. I dumped the GE April calls for a 40% loss. I do not think GE will move above the strike price of 21 in the next 4 weeks. I could have gotten a slightly better price during the session but just getting out of a losing trade was the correct action in my opinion. The GE trade was a poor decision on my part and I payed for it. Gold was up $8 today and the XAU gained 2 1/2. ABX, GG and NEM all had fractional gains on light volume. I would like to try the gold share calls for April or May. That should be my next trade. I would like to see a base building period here before purchase. We'll see. The dollar had a very weak day. Golds reaction was somewhat muted. I will be keeping an eye on things here. Mentally I'm a bit tired. Trying not to think too much about getting a better price for the April GE calls. It shouldn't matter much because the money involved was minimal. However you want to do your best regardless of the money. I suppose my best today wasn't as good as it could have been. But as usual it's always easy looking back. I'll put that poor trade behind me and go from here. We'll see if the recent volatility continues going forward. The VIX index is at its highest reading since last May. If we get a reversal there I'll be looking to go long somewhere. Expiration Friday tomorrow.
Wednesday, March 16, 2011
We are are moving in what could be called a waterfall effect as the Dow dropped 242 points on heavy volume. Advance/declines were over 3 to 1 negative. Summation index heading lower with no end in sight as of yet. We are oversold as I said yesterday. There will be a bounce. The timing of which is the question. Perhaps we will just continue lower into the expiration. It's all just a guess in an event driven market that we find ourselves in. GE lost 2/3 on very heavy volume. This trade was a loser from the start. It happens. I'm not sure that even waiting for a bounce will help much here. It's a cut the loss mode for this trade now. Not a lot of money involved thankfully and it will be the first loser of the year. I probably should have just dumped it today. The time taken to monitor this trade is keeping me away from something else potentially profitable. Because there are opportunities out there now, make no mistake about that. Gold was up a few bucks today and the XAU lost 4 1/2. ABX down 7/8, GG off 2/3 and NEM fell 1 3/4. Volume here was good again. We are at a buy signal in the gold/XAU ratio. But we are still in the month of March. I do want to try some gold share calls but in this kind of market it's tough to call a bottom. Oversold on the gold shares here as well. I'd like to see some base building first. The dollar was up a bit today. Mentally I'm a bit tired, did not sleep well. The market is falling apart here and I own some GE calls. Obviously this isn't the right strategy. Mistakes will be made and this is one of them. I really need to get out of this trade and not compound the loss. GE is probably not going to come back in the next 4 weeks to make this trade profitable. I should be out tomorrow. We'll see.
Tuesday, March 15, 2011
Another downer today as the Dow lost 138 points on good volume. Advance/declines were about 3 to 1 negative. We were down twice as much early but the Dow managed to come back again. Oversold here and I would expect a bounce. However we are in such an event driven marketplace at the moment that anything goes. We had a Fed meeting and announcement today and it took a back seat to the Japan saga. I do like how the US market has held up here though. GE lost 1/3 on very heavy volume. It too made a significant comeback and was down a full point more than where it closed. My GE April calls are in the red. I'm thinking of just dumping them if we get the anticipated bounce in the next couple of days. This is a precarious trade at this point. I do not think that holding on into April is the proper course of action. We'll see. Gold got hammered, off $32. The XAU only fell 2 1/4 as the gold shares came back as well. ABX fell 1 3/4, GG off 1 1/8 and NEM down only 1/4. Volume was a bit higher than average. The dollar was higher early but sold off to close about unchanged. Perhaps the Fed had an influence there. That's a guess. I still want to try the April gold share calls but would like to see a base build in here first. You don't always get what you want. However, the gold shares held up much better than the metal itself and that could be a positive going forward. Mentally I'm doing OK, slept well enough. Volatility has picked up here and that makes for shorter holding periods in general for the option trades. There are opportunities. The summation index remains to the downside and that must be taken into account. It's only Tuesday but the week seems like it has lasted a long time already. We'll see if the Nikkei keeps dropping overnight and go from there.
Monday, March 14, 2011
An interesting Monday here as the Dow lost 51 points on average volume. We were down almost 150 during the day. Advance/declines were 2 to 1 negative. Overseas markets tanked but the Dow held up rather well. We'll see what happens tomorrow. Summation index still heading lower. GE fell almost 1/2 on heavy volume. I did put in an order for the April calls overnight and it was filled. I'm not sure this is a trade I want to be in at this point. However GE made a good comeback during the day as well. The calls recovered to break even. I'll have to ponder the trade this evening. Gold gained $3 today and the XAU lost 3/8. ABX, GG and NEM all had fractional gains on light volume. I also left in an open order for some April ABX calls overnight. It wasn't filled and I canceled it. I am still interested in this trade for later this month. The dollar was weaker today. Mentally I'm doing OK. Expiration week is upon us. There is usually a positive bias. However with global events as they are lately, anything goes. More oversold than overbought here on the stock indices. We'll see what tomorrow brings.
Friday, March 11, 2011
A bounce back today as the Dow gained 60 points on light volume. Advance/declines were 2 to 1 positive. Hard to say where we go from here. Technicals remain oversold. I will have to ponder things over the weekend. GE gained 1/4 on average volume. I'm still considering the April calls there. Gold was up around $10 today and the XAU gained almost 4 points. The gold/XAU signal looks valid but I'm wary. It is the month of March. ABX, GG and NEM all had gains of 1/3 to 5/8 on light volume. The weekly charts there don't look good after the recent decline in prices. I'm still considering the April calls though. The dollar fell pretty good today. I'll need to check things here this weekend as well. Mentally I'm doing OK, slept good for a change. Expiration week is upon us and the risk is high. I'll really need to see something solid to attempt a trade. It's Friday afternoon and time for a rest.
Thursday, March 10, 2011
It was a downer as we broke and closed below 12000 on the Dow. At the end of the day it was a 228 point loss on average volume. Advance/declines were 5 to 1 negative. Topics of discussion were a weakening economy in China and civil unrest in Saudi Arabia. The summation index has been moving sideways but today could be the catalyst that actually turns things down. We'll see. The uptrend line from the end of last August on the S&p 500 has been broken. That doesn't mean that we'll go straight down here but it does bear significance. Tomorrow should be interesting. GE lost 1/2 on good volume. I did put in an order for some April calls there today but it wasn't filled. I canceled the order before the close to reassess the situation. Oversold there and approaching the 50 day moving average. I will check things tonight. Gold lost $17 today as the dollar was stronger. Could the flight to safety trade be making a comeback? Time will tell. The XAU fell almost 6 points. ABX, GG and NEM all dropped more than a point on increased volume. The gold/XAU ratio is right at the buy signal. Perhaps just a short term trade here would be worthwhile, I'm not sure. March is historically the worst month for gold and the weekly charts for the gold shares are looking bearish. We are oversold on the gold shares short term though. I've been looking at the April options here but I will have to rethink things this evening. Mentally I'm doing the best I can with the outside influences and the increased volatility. I can say that things are getting better for me with each passing day. I do feel a sense of opportunity here but it won't be easy to figure out how to capitalize on it. 6 days to go for the March option cycle. We'll see what happens overseas tonight and go from there.
Wednesday, March 09, 2011
I've made it back to the home base but there is plenty of work to do. The markets volatility has picked up. We've been moving sideways for 3 weeks after hitting recovery highs. The longer term uptrend line is still in place for now. Gold went to new highs but has been stalled there. The gold/XAU ration is almost at a buy signal. 7 days left in the March option cycle. I may try something but the prudent course of action would be to ease my way back into things. We'll see about that. GE has followed the overall markets pattern. I should be back with the regular posts tomorrow.
Thursday, March 03, 2011
It is the middle of the market day on Thursday and the stock indices are moving higher. We are up over 150 points. I am still not back at my desk but will return at some point next week. Volatility has picked up here but the major uptrend lines in the indices haven't been broken. Gold is trying to break out here but the gold share indices are not following suit. Gold is down today. The 77 level in the US dollar has been slightly violated. Tomorrows employment report could be the key there. Or not. The markets go where they want. GE is trying to hold up here as it did go down and touch the $20 level. My thoughts are scattered even more than usual as I deal with things outside of the markets realm.